Data is the foundation of the competitive advantage of many companies as it provides key actionable insights that have a significant impact in the customer experience. Setting the basis for a data-driven commerce begins with a solid strategy that clearly defines how to collect the right data, establish proper metrics and serve as basis to prove results to the rest of the organization. In this page we present the key points to consider when setting the data strategy for commerce.
Enterprises need to be digitally mature if they want to survive and successfully compete with today’s born-in-the-cloud companies. With the excessive amounts of data currently available, it’s more important than ever to collect and use the data that actually leads to insights into the behavior and needs of your customers. Making decisions based on instinct, assumptions, personal preference, or unfounded hypotheses leaves too much room for error. Without data, you’re effectively flying blind. With the correct and validated data however, you can match and even surpass their expectations, and deliver a truly effective customer experience.
When talking about data, we refer to the collection of statistics or facts gathered to analyze a specific part of your business. For the Average Order Value metric, as a simple example, the data consists of the actual number of transactions and the total order amount. By establishing and tracking proper key metrics, the organization can actively monitor if they are moving in the right direction.
Not all data is equally valuable. There’s an infamous case about a non-profit digital platform that was striving for social change, as documented in the HBR article Know the Difference Between Your Data and Your Metrics. For dosomething.org social change is the most important goal, so when a YouTube video asking for donations was a smash hit, with 1.5 million views, they considered this a success. However, it turned out only eight viewers had actually signed up to donate equipment. And more shockingly, zero viewers actually ended up donating.
So how do you make sure that you measure if the needle actually moves when it comes to profit and customer satisfaction? The aspects of your business that really matter to you and your customers.
To ensure you’re asking the right questions we highly recommend you begin with identifying your digital strategy, and how you intend to measure success. Additionally, your digital strategy should be connected to business goals.
Your digital strategy will give direction to what data is the best measure of progress toward the achievement of business goals.
Seek out measures that provide a good indication whether or not your efforts have improved profit and customer satisfaction. Those are the metrics that really show the impact of your digital investments.
Using the correct data enables businesses to make decisions based on facts instead of assumption, so it should come as no surprise that data-driven decisions are more effective.
Data-driven design in turn can help you truly understand the target audience’s needs and wants. It validates you’re on the right track, and at the same time reveals opportunities and users' pain points.
The most effective way of running a data-driven ecommerce business is by measuring key metrics, and use them to fuel a continuous improvement process. That’s how you turn uncertainties, assumptions and risks into guaranteed wins that guide you towards your goals.
If the results of e-commerce are made more transparent, that also means they’ll be under more scrutiny. Fortunately, there are many benefits to being a data-driven business.
Financial data can be provided by the accounting department, but when it comes to customer data, an agency can add valuable knowledge and hands-on experience. Agencies have both broad (multiple clients from various industries) and deep (specialised professionals and tools) knowledge about how to best capture customer behaviour, and how to turn that data into actionable insights.
At SQLI we firmly believe that in order to truly understand your customers, you have to maintain focus on the complete customer journey, from beginning to end. A well designed data-driven architecture forces teams to focus on a small and more easily managed set of KPI’s for each step in the customer journey, making it easier to identify bottlenecks and blockers. Furthermore, with correctly defined KPI’s the data becomes actionable, so you know exactly what to do when a metric turns from green to red or vice versa.
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